Summer is a great time for a financial check-up. Here's what you should do

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Posted at 5:16 AM, Jul 15, 2021

(WXYZ) — Summer is a time of family vacations, camps and backyard barbecues. All of that costs money, but experts also say summer is a perfect time for a financial check-up.

After all, we've had some big changes since last March. We've lost millions of jobs, and millions of jobs have come back. Also, starting Thursday, millions of Americans will receive the first advance payment of the higher child tax credit.

There are a million reasons to keep a close eye on your financing. Kirk Cassidy is a financial instructor with the Retirement Education Foundation. He says to treat your financial health like your physical health.

"With your physical health, we go to the doctor for checkups. I personally believe the middle of the year is a great time to check up on your finances," he said.

Here are some tips to do a financial check-up.

1: Evaluate your budget

That's because it gives you time to course correct. Cassidy says the check-up should start with your budget. Are you spending more than you're bringing in? With back to school right around the corner and holiday spending coming, the time to reign in the spending is now.

"It gives you some time to pivot so you don't go into debt," Cassidy said.

2: Make sure your beneficiaries are up to date

Step two, make sure your beneficiaries are up to date on checking and savings accounts, 401k, and all of your important financial documents like your will, insurance and your financial and healthcare powers of attorney. That's a powerful and painful lesson of the pandemic

"2020 was a horrific year, but it did teach us a lot of lessons. And one of those important lessons where we don't get to control when we get sick or if we die," he said.

Who should have a will? The answer depends on your stage of life. If you're married, have children, or a lot of assets, then yes a will is necessary to make your wishes known.

"If you don't have your beneficiaries updated properly, it creates a nightmare for your loved ones," he said.

3: Build up you emergency fund

Is your emergency fund on life support? Lots of us used the money to get through the pandemic. Now is the time to start building it back up for the next rainy day.

"Six to 12 months of liquid savings for any sort of unexpected event that comes up in the near future," Cassidy said.

4: Check your credit report

Finally, you'll also want to check your credit report.

According to the Federal Trade Commission, one in four consumers found errors on their credit score that might impact their credit scores. That was before millions of Americans received deferred payments, forbearance and lower interest rates and lower monthly payments. The volume of these changes could mean more errors for American consumers.

No matter where you are in life. coming out of the pandemic has forced many of us to rethink what important and refocus on what's dear.

How often you conduct a financial check-up depends on your age.

Cassidy says if you're under 50, typically once a year is good enough, but as you approach 50, conducting that review twice a year is a good idea to keep an eye on your spending, savings, investments to make sure we stay on track with our financial goals.

Additional Coronavirus information and resources:

View a global coronavirus tracker with data from Johns Hopkins University.

See complete coverage on our Coronavirus Continuing Coverage page.

Visit our The Rebound Detroit, a place where we are working to help people impacted financially from the coronavirus. We have all the information on everything available to help you through this crisis and how to access it.